Deposit mobilisation not a challenge for bank, says SBI chairman Dinesh Khara

“We are in a position to support our loan book growth well. So, I think so long as we can support the loan book growth well, I don't think we do have any challenge,” Khara said, while speaking on the sidelines of the 38th regional conference of Western India Regional Council.

In response to declining deposits, several Indian public sector and private banks have launched limited-period special fixed-deposit (FD) schemes with higher interest rates for specific tenures.

India's largest private-sector lender HDFC Bank also rolled out a special edition FD scheme, offering attractive interest rates for select tenures of 35 and 55 months, while country's another private-sector bank ICICI Bank recently updated its FD interest rates, effective from July 2, 2024.

Axis Bank, similarly, adjusted its term deposit rates from July 1, 2024.

Further, on the challenges of deposit growth in the banking system and the booming mutual fund industry, the SBI chairman said in developing countries, the banking system typically surpasses the size of the markets.

“When we look at the developed markets, there we have seen the markets become bigger than the banking system. But as of now, of course, in the developing countries, we have generally seen that the banking system is bigger than the size of the markets… Even in the UK also, the banking system continues to be bigger than the markets. So, I think much of it will be the choice of the investors and the kind of products which will be rolled out by the banking system,” Khara said. 

The credit growth of SBI stood at 15.39 percent on a year-on-year (YoY) basis in the first quarter of the current financial year (Q1FY25), with domestic advances growing at 15.55 percent YoY and foreign offices' advances rising by 14.41 percent YoY, reports Business Standard.

SBI's total deposits grew 8.18 percent to Rs 49,01,726 crore as on June 30, 2024 as against Rs 45,31,237 crore as on June 30, 2023, out of which Current Account and Savings Account (CASA) deposit grew by 2.59 percent YoY, while CASA ratio slipped 218 bps to 40.70 percent as of June 2024, according to a report by Business Standard.